Social Values Choice Bond Fund (SVCBF)

Fund Availability

SVCBF is only available to institutional investors.

 


Fund Objective, Strategy and Holdings

The Social Values Choice Bond Fund (SVCBF) seeks to earn current income while preserving capital by primarily investing in a diversified mix of fixed-income instruments issued by entities that fulfill investor preferences for a heightened focus on corporate environmental and social performance. The fund invests primarily in fixed income securities such as U.S. and non-U.S. government bonds, agency bonds, corporate bonds and securitized products.

Management

SVCBF, in response to concerns expressed in petitions approved by a threshold number of annual conferences, excludes companies with fossil fuel reserves used for energy purposes. Additionally, and in response to concerns expressed in petitions approved by a threshold number of annual conferences, SVCBF excludes specific companies that are the subject of annual conference resolutions concerning peace in the Middle East. Both the Fiduciary Committee and UMC Principles Committee of Wespath’s board of directors have approved these additional exclusions.

Like Wespath’s other funds, SVCBF does not invest in companies that derive more than 10% of their revenue from gambling or from the manufacture, sale or distribution of alcoholic beverages, tobacco-related products, adult entertainment, weapons, or the management or operation of prison facilities.

Asset Manager

* Signatory to the United Nations Principles for Responsible Investment

Performance Review

During the third quarter of 2017, the fund’s overweight allocation to investment-grade credit was the largest positive contributor to benchmark-relative results. The modest overweight to local currency emerging market debt also benefited relative results.

Performance, Net of Fees - September 30, 2017

  3 mo YTD 1 yr 3 yr 5 yr 10 yr
Social Values Choice Bond Fund
1.21%
N/A
N/A
N/A
N/A
N/A
Benchmark*
1.02%
N/A
N/A N/A
N/A
N/A

* The performance benchmark for SVCBF is the Bloomberg Barclays U.S. Universal Ex MBS Index.
 

Fund Characteristics as of September 30, 2017

  SVCBF SVCBF
Benchmark
Effective Duration 5.63 6.14
Effective Convexity 0.30 0.76
Yield to Worst 2.95% 2.84%
Effective Maturity 7.31 8.39
Average Quality A A+



Fund Distribution by Credit Quality as of September 30, 2017

SVCBF chart 1 


Expense Ratio

SVCBF's inception date is June 30, 2017. SVCBF's estimated annual expenses for 2017 are approximately 0.53% of the fund’s total assets. Estimated expenses assume an initial fund size of $75 million. Actual expenses for the fund may be different than these estimated expenses.

All expenses of the fund are deducted from the fund’s net asset value. The expenses include investment management fees, operating expenses, bank custodial fees and miscellaneous fund administration expenses. These expenses are paid directly by SVCBF, and are reflected in the unit price calculated for the fund. The unit price is multiplied by the number of units held in each client’s account to determine the total value of the client’s holdings in the fund.

Risk and Disclosures

SVCBF is designed for investors who have a heightened focus on corporate environmental and social performance and seek a greater portion of their investment return from current income, rather than capital appreciation, but exhibit willingness to incur some market risk for the potential of modest capital appreciation.

All investments carry some degree of risk that will affect the value of SVCBF's holdings, its investment performance and the price of its units. As a result, loss of money is a risk of investing in the fund. SVCBF is subject to the following principal investment risks: credit risk, country risk, currency risk, derivatives risk, interest rate risk, investment style risk, liquidity risk, market risk, prepayment risk, security-specific risk and yield curve risk. Additionally, SVCBF is subject to modestly increased diversification risk, as compared to broad-market fixed income funds, because of the exclusion of a significant number of issuers from the investment universe (i.e., the exclusion of companies with fossil fuel reserves used for energy purposes).

For further discussion of the fund’s investment strategies and risks, please refer to Supplement #1 to the Investment Funds Description.

Lending of Portfolio Securities

The fund seeks to earn additional income by lending a portion of its portfolio securities to brokers, dealers and other financial institutions. The loans are secured at all times by cash and liquid high-grade debt obligations. As with any extension of credit, there are risks of delay in recovery and in some cases even loss of rights in the collateral should the borrower fail financially. In addition, losses could result from the reinvestment of the cash collateral received on loaned securities.

Fund Facts

Inception June 30, 2017
Exp. Ratio 0.53% for 2017 (estimated; for more information see the Expense Ratio section below)
Benchmark Bloomberg Barclays U.S. Universal (ex mortgage-backed securities)
Fund Assets
$0.08 Billion as of November 30, 2017
Holdings September 30, 2017
Unit Price History Wespath Funds Price History
For More Information Supplement #1 to the Investment Funds Description
 

Fund Managers

frank-holsteen

Frank Holsteen

Director, Fixed Income
With Wespath since 2012
B.A. from Lake Forest College
 
 
constance-christian

Constance Christian, CFA

Manager, Fixed Income
With Wespath since 2016
BSBA and MBA from Xavier University
MA from DePaul University
 
 
 
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